Instagram Forgot to Prototype Their Business

 Photo by JD Hancock

 Photo by JD Hancock

Last week, the Wall Street Journal wittily reported that "Instagram Pictures Itself Making Money." The photography app, purchased by Facebook last year, launched in 2010 without a business model. Suddenly, it finds itself in an unsustainable situation.

This is why Emily White, the director of business operations, plans to lead Instagram in the direction of ads and marketing. Like its parent Facebook, the app would make revenue from targeted ads that stem from the information on your profile.

You have to empathize with Instagram. Right now, brands are leveraging the platform with creative marketing campaigns to gain followers. For example, a few weeks ago, I noticed a stream of photos from a photographer I follow on Instagram. He was taking a road trip and documenting along the way. It was only upon further inspection that I realized it was for an ad for BMW. But Instagram gets nothing in this exchange. They have user desirability, technological feasibility, but they lack business viability. What’s a company to do?

When Facebook changed over to ads because of similar reasons, Facebook users were outraged. Eventually, they got used to it.

In a recent Fortune blog post, tech writer JP Mangalindan postulates it might not even be a bad thing, “…I'm willing to live with them because Facebook has to make its money somehow, and I'd rather not have to pony up for a monthly or annual subscription." 

I agree with Mr. Mangalindan's point, but I don't think that Instagram and Facebook can approach ads the same way. Why? While both companies are social, they fulfill different user needs.

Instagram is about sharing moments. It's visual, and it's rooted in the habit forming variable rewards of scrolling on a smartphone and coming across a picture you like. You like it, and move on. When someone likes your image, you feel good. The value of Instagram partially stems from the fact that it's cool and that you get an emotional reward for recognition. Likes also happen on Facebook, but here content is in the verbal and the visual.

Furthermore, the Facebook interface doesn’t rely on the same habitual behaviors as Instagram, and the addition of ads wasn't as jarring to the user experience as it would be on a smaller, image-heavy, smartphone screen. 

At Peer Insight, when we design a new technological service, we prototype the business model alongside the technological prototype. The design and the business are tested in tandem, decreasing the risk of alienating users. Ultimately, this iterative parallel testing helps a company deliver on its mission. Instagram's mission is:

To capture and share the world’s moments.

Instagram's mission is pushing the boundaries out of this world, too. Check out these beautiful photos on NASA's Instagram account.  I hope that the introduction of a revenue model and advertisements do not tarnish the essence of the moments caught by Instagram users and brand accounts. 

To see my earlier post about how Instagram helps us reframe the world, click here.

What do you think of Instagram's decision to add advertising?   

Message me: @alissa_joelle